Study on the feasibility and effectiveness of tax policy changes to support inclusiveness and sustainability of growth

Detailed description of project Back

Tax policy is decisive in generating public revenues to maintain fiscal balance and to strengthen domestic accountability as well as the capacity to finance development expenditures and fiscal resilience to external shocks. It redistributes purchasing power within society and its effect is a major determinant of the level of inequality and poverty. It is therefore crucial to have a good understanding of the feasibility and effectiveness of tax policy reforms to inform the policy dialog of the European Union with partner countries, which is the purpose of current assignment. The study will is to be implemented as follows:

• Development of a comprehensive methodology to support the identification of political, administrative and other relevant drivers and constraints on changes in tax policy in a given country;
• Design of a methodology for conducting case studies providing information on tax reforms in developing countries;
• Conduct a set of nine case studies conducted according to the methodology developed making these studies and related evidence easily accessible in a register and drawing conclusions from this collected evidence.

Type of services provided

PROMAN provides the services of a tax expert in a team of four experts.

Services cover:

• A review of the literature in economics and social sciences between 2002-2012;
• Development of a research strategy using case studies;
• Nine country studies covering each a tax policy reform. (PROMANs expert covers Rwanda, Uganda, Kenya and the Philippines) with a desk phase and a field phase providing the raw data or evidence base and the report of the investigator;
• Syntheses of the main results of the case studies and conclusion to be drawn from the comparison of their results;
• Guidance notes for development practitioners how to make best use of the study for identifying drivers and constraints to increased domestic revenue mobilisation through tax policy;
• Three workshops with the EC and stakeholders to present intermediate and final results.